Exhibit 10.39
CLOSING ITEM NO.: A-12
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XXXXXXXX ADHESIVES, INC.
and
KEYBANK NATIONAL ASSOCIATION
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PLEDGE AND SECURITY AGREEMENT
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DATED AS OF OCTOBER 1, 1997
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PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT (the "Agreement"), dated as of
OCTOBER 1, 1997, by and between XXXXXXXX ADHESIVES, INC.. a Virginia corporation
having an address at 0000 Xxxxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the
"Company"), and KEYBANK NATIONAL ASSOCIATION, a national banking association
organized and existing and existing under the laws of the United States and
having an office at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000-0000 (the
"Bank"):
WHEREAS, the County of Saratoga Industrial Development Agency (the
"Issuer") has agreed with the Company to issue its $6,000,000 aggregate
principal amount Multi-Mode Variable Rate Industrial Development Revenue Bonds
(Xxxxxxxx Adhesives, Inc. Project), Series 1997 A (the "Bonds"), under a certain
trust indenture dated as of October 1, 1997 (the "Indenture"), between the
Issuer and Star Bank, N.A., as trustee (the "Trustee"); and
WHEREAS, the Bank has agreed to issue its irrevocable, transferable,
direct-pay letter of credit (the "Letter of Credit") pursuant to the terms of a
certain letter of credit reimbursement agreement dated as of October 1, 1997,
between the Company and the Bank (together with any other subsequent credit and
reimbursement agreements by and between the Company and the Bank collectively
the "Reimbursement Agreement"); and
WHEREAS, in connection with the issuance of the Bonds, the Company has
agreed to enter into the Reimbursement Agreement in order to induce the Bank to
issue the Letter of Credit thereunder which may be used, inter alia, to pay the
purchase price of Bonds which are not successfully remarketed in the event that
a Bondholder (as defined in the Indenture) exercises a demand purchase option or
in the event that such Bonds are subject to mandatory tender; and
WHEREAS, it is a condition precedent to the obligation of the Bank to
issue its Letter of Credit that the Company shall have entered into this
Agreement with the Bank;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit pursuant to the Reimbursement Agreement
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Defined Terms. Unless otherwise defined herein, terms defined in the
Reimbursement Agreement shall have such defined meanings when used herein.
SECTION 2. Pledge. The Company hereby pledges, assigns, hypothecates, transfers,
and delivers to the Bank all of its right, title and interest to all Bonds which
may from time to time be delivered by the Trustee to the Bank in connection with
a drawing by the Trustee under the Letters of Credit for a Bond Purchase
Drawing-Principal or a Bond Purchase Drawing-Interest (both as defined in the
Letter of Credit) to purchase Bonds which have not been successfully remarketed
by the Remarketing Agent (the "Purchased Bonds"), and hereby grants to the Bank
a first lien on, and security interest in, all right, title and interest in and
to the Purchased Bonds and all proceeds thereof, as collateral security for the
complete payment when due of all amounts due to the Bank from the Company under
the Reimbursement Agreement and interest on such amounts as set forth therein
and all obligations due and owing the Bank under any of the other Financing
Documents (collectively, the "Obligations").
SECTION 3. Registration of Bonds.
(A) Upon delivery thereof to the Bank, Purchased Bonds shall be
registered in the name of the Company and shall be duly endorsed for transfer by
the Company in blank, or the Company shall have delivered to the Bank
appropriate instruments of transfer duly executed in blank by the Company. The
Bank may, but shall not be obligated to, register Purchased Bonds in its name or
that of its agent at any time and from time to time.
(B) If, while this Agreement is in effect, the Company shall become
entitled to receive or shall receive any payment, including, without limitation,
any payment of principal, premium, interest or proceeds of sale with respect to
the Purchased Bonds, such payment shall be subject to this Agreement, and the
Company hereby irrevocably directs the Trustee to make any such payments
directly to the Bank and, in the event any such payments are received by the
Company, the Company agrees to accept the same as the Bank's agent and to hold
the same in trust on behalf of the Bank and to deliver the same forthwith to the
Bank. All sums of money so paid with respect to the Purchased Bonds which are
received by the Company and paid to the Bank, and all such amounts which shall
be paid directly to the Bank by the Trustee, shall be credited against the
corresponding reimbursement obligations of the Company under the Reimbursement
Agreement.
(C) During such time as Bonds are pledged to the Bank under the
terms of this Agreement, the Bank shall be entitled to exercise all of the
rights of an owner of Bonds with respect to voting, consenting and directing the
Trustee as if the Bank were the owner of such Bonds, and the Company hereby
grants and assigns to the Bank all such rights.
SECTION 4. Collateral. All Purchased Bonds at any time pledged hereunder and all
income therefrom and proceeds thereof, are herein collectively referred to as
the "Collateral".
SECTION 5. Release of Bonds. Simultaneously with the receipt by the Bank of the
proceeds of the sale of any Purchased Bonds in an amount equal to the principal
amount of Purchased Bonds remarketed by the Remarketing Agent pursuant to the
Remarketing Agreement, together with any interest accrued on account of the Bond
Purchase Drawing-Principal or Bond Purchase Drawing-Interest, Purchased Bonds in
the principal amount equal to the principal amount received by the Bank from
said sale shall be released from the lien of this Agreement and shall be
delivered to the Remarketing Agent, and such payment shall increase the amount
payable under the Letter of Credit with respect to Bond Purchase
Drawings-Principal and/or Bond Purchase Drawings-Interest.
SECTION 6. Rights of the Bank. The Bank shall not be liable for failure to
collect or realize upon the Obligations or any collateral security or guarantee
therefor, or any part thereof, or for any delay in so doing nor shall it be
under any obligation to take any action whatsoever with regard thereto. If an
Event of Default on the part of the Company under the Reimbursement Agreement
has occurred and is continuing, the Bank may thereafter without notice exercise
all rights, privileges or options pertaining to any Purchased Bonds as if it
were the absolute owner thereof, upon such terms and conditions as it may
determine, all without liability, except to account for property actually
received by the Bank; provided, however, the Bank
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shall have no duty to exercise any of the aforesaid rights, privileges or
options and shall not be responsible for any failure to do so or delay in so
doing.
SECTION 7. Remedies. If an Event of Default has occurred and is continuing, and
any portion of the Obligations has been declared due and payable, the Bank,
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of the time and place of public or
private sale) to or upon the Company or any other Person (all and each of which
demands, advertisements and/or notices are hereby expressly waived), may
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, assign, give option or options to
purchase, contract to sell or otherwise dispose of and deliver all or any part
of the Collateral, in such manner as the Bank may elect, including a purchase
for its own account, upon such terms and conditions and at such price as it may
deem advisable. All Purchased Bonds so sold shall be free of any right or equity
of redemption in the Company, which right or equity is hereby expressly waived
or released. The Bank shall apply the net proceeds of any such realization of
sale, after deducting all reasonable costs and expenses incurred in connection
therewith including reasonable attorneys' fees, to the payment in whole or in
part, of the Obligations in such order as the Bank may elect. The Company shall
remain liable for any deficiency remaining unpaid after such application, and
the Bank shall be required to account to the Company for any surplus only after
so applying such net proceeds and after the payment by the Bank of any other
amount required by any provision of law. The Bank shall give ten (10) days'
notice of the time and place of any public sale or of the time after which a
private sale or other intended disposition of the Purchased Bonds is to take
place and such notice shall constitute reasonable notification thereof. In
addition to the rights and remedies granted to it in this Agreement and in any
other instrument or agreement securing, evidencing or relating to any of the
Obligations, the Bank shall have all the rights and remedies of a secured party
under the Uniform Commercial Code of the State of New York.
SECTION 8. Representations, Warranties and Covenants of the Company. The Company
represents and warrants that:
(A) on the date of delivery to the Bank of any Purchased Bonds
described herein, neither the Issuer, the Remarketing Agent, the Trustee nor any
other Person will have any right, title or interest in and to the Purchased
Bonds;
(B) it has, and on the date of delivery to the Bank of any
Purchased Bonds will have, full capacity and legal right to pledge all of its
right, title and interest in and to the Purchased Bonds pursuant to this
Agreement;
(C) this Agreement has been duly authorized, executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the
Company enforceable in accordance with its terms;
(D) no consent of any other party including, without limitation,
creditors of the Company and no consent, license, permit, approval or
authorization of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by the
Company in connection with the execution, delivery or performance of this
Agreement;
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(E) the execution, delivery and performance of this Agreement will
not violate the Company's Articles of Incorporation or by-laws or any provision
of any applicable law or regulation or of any order, judgment, writ, award or
decree of any court, arbitrator or Governmental Authority, or of any mortgage,
indenture, lease, contract, or other agreement, instrument or undertaking to
which the Company is a party or by which it is bound or upon any of its assets
and will not result in the creation or imposition of any lien, charge or
encumbrance on or security interest in any of the assets of the Company except
as contemplated by this Agreement which would have a material and adverse effect
on the security of the Bank;
(F) there is no pending action or proceeding before any court,
governmental agency or arbitrator against or directly involving the Company and,
to the best of the Company's knowledge, there is no threatened action or
proceeding affecting the Company before any court, governmental agency or
arbitrator which, in any case, is likely materially to impair the Company's
ability to perform its obligations under this Agreement; and
(G) the pledge, assignment and delivery to the Bank of such
Purchased Bonds pursuant to this Agreement will create a valid first lien on and
a first perfected security interest in all right, title and interest of the
Company in and to such Purchased Bonds, and the proceeds thereof, subject to no
prior pledge, lien, mortgage, hypothecation, security interest, charge, option
or encumbrance or to any agreement purporting to grant to any third party a
security interest in the property or assets of the Company which would include
the Purchased Bonds.
The Company covenants and agrees that it will defend the Bank's right,
title and security interest in and to the Purchased Bonds and the proceeds
thereof against the claims and demands of all Persons whomsoever, and covenants
and agrees that it will have like title and right to pledge any other Property
at any time hereafter pledged to the Bank as Collateral hereunder and will
likewise defend the Bank's right thereto and security interest therein.
SECTION 9. No Disposition, etc. Without prior written consent of the Bank, the
Company agrees that it will not sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
of the Collateral, or any interest therein, or any proceeds thereof, except for
the lien and security interest provided for by this Agreement.
SECTION 10. Sale of Collateral.
(A) The Company recognizes that the Bank may be unable to effect a
public sale of any or all of the Purchased Bonds by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state securities laws, but may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers who will be obligated to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. The
Company acknowledges and agrees that any such private sale may result in prices
and other terms less favorable to the seller than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner so long as
the Company shall have been given not less than 10 days prior notice of the date
and terms of such private sale. The Bank shall be under no obligation to delay a
sale of any of the Purchased Bonds for the
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period of time necessary to permit the Issuer to register such securities for
public sale under the Securities Act, or under applicable state securities laws,
even if the Issuer would agree to do so.
(B) The Company further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of any
portion or all of the Purchased Bonds valid and binding and in compliance with
any and all applicable laws, regulations order, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities
having jurisdiction over any such sale or sales, all at the Company's expense.
The Company further agrees that a breach of any of the covenants contained in
this paragraph 10 will cause irreparable injury to the Bank, that the Bank has
no adequate remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant contained in this paragraph shall be
specifically enforceable against the Company and the Company hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Reimbursement Agreement.
SECTION 11. Further Assurances. The Company agrees that at any time and from
time to time upon the written request of the Bank, the Company will execute and
deliver such further documents and do such further acts and things as the Bank
may reasonably request in order to effect the purposes of this Agreement.
SECTION 12. Notices. All notices provided for hereunder shall be in writing and
shall be mailed or delivered to the respective parties hereto as follows:
If to the Company to:
IF TO THE COMPANY:
Xxxxxxxx Adhesives, Inc.
0000 Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Executive Vice President
WITH A COPY TO:
Xxxxxxxx Xxxxxx Xxxxxxxxx & Xxxxxxx, P.C.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Dallas, Jr., Esq.
IF TO THE BANK:
KeyBank National Association
00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000-0000
Attention: Corporate Banking Division
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WITH A COPY TO:
Crane Xxxxxx Xxxxxx & Parente
00 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
or as to each party at such other address as shall be designated by such party
in a written notice to each other party. All such notices shall be in writing
and shall be deemed given when (A) sent to the applicable address stated above
by registered or certified mail, postage prepaid, return receipt requested, or
by such other means (including, but not limited to, personal delivery) as shall
provide the sender with documentary evidence of such delivery, (B) delivery is
refused by the addressee as evidenced by the affidavit of the person who
attempted to effect such delivery.
SECTION 13. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 14. No Waiver; Cumulative Remedies. The Bank shall not by any act,
delay, omission or otherwise be deemed to have waived any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Bank, and then only to the extent therein set forth. A waiver by the Bank of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Bank would otherwise have on any future occasion.
No failure to exercise or any delay in exercising on the part of the Bank any
right, power or privilege hereunder, shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided are
cumulative and may be exercised singly or concurrently, and are in addition to
and are not exclusive of any rights or remedies provided by the other Financing
Documents, or by law or in equity.
SECTION 15. Waivers, Amendments; Applicable Law. None of the terms or provisions
of this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by the Company and the Bank. This Agreement
shall be binding upon, and shall inure to the benefit of the parties hereto and
their respective, successors and assigns. This Agreement shall be governed by,
and be construed and interpreted in accordance with, the laws of the State of
New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized by its officers as of the day
and year first above written.
XXXXXXXX ADHESIVES, INC.
BY: /s/ Xxxxxxx X. Xxxxxxx
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ITS: Xxxxxxx X. Xxxxxxx, Executive Vice President
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KEYBANK NATIONAL ASSOCIATION
BY: /s/ Xxxxxxx X. Xxx Xxxxx
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ITS: Senior Banker
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